Bridging the ­Procurement Divide

CHRIS MACLEAN
© 2018 FrontLine Defence (Vol 15, No 2)

A critically honest and engaged discussion about government and industry engagement, was held recently at the Telfer School of Management as part of the new Complex Project Leadership Programs.

The program participants (mostly federal civil servants who are involved in procurement) interacted with executive-level industry leaders – Joe Armstrong, Vice President and General Manager at CAE; Jerry McLean, Vice President and Managing Director of Thales Canada; Iain Christie, Vice President of AIAC; and Kevin Ford, CEO of Calian – who shared their leadership insights, as well as what it is really like to do business in Canada.

Through the highlighting of mutual pain points and frustrations, as well as identifying what is being done well and ways to move forward together, efficiently, each party gained insight and understanding that is sure to improve communication and future progress. It was evident that both sides wanted to learn from each other and pinpoint the principles that would help achieve mutual success; ultimately impacting the national economic footprint and saving taxpayer dollars.

From the industry perspective, dependability equals direction. When a company can be assured that it has a fair opportunity to compete for a contract, it can set its sights on that goal and will make the necessary investments to ensure the best possible outcome. When government programs start and stop and change and restart, companies find it difficult to justify the extended costs because they lose their competitive edge and/or any ability to make a profit. Instability does not save the taxpayer, but it does have the potential to impact both quality of product and sustainability of the bidders (therefore employment numbers).

Contracts equal sustainability and confirmation that the company direction is on track for success.

Profit equals growth and further investment. Employment and supply chain purchases depend on a profit margin that allows growth. This “number one” business requirement conflicts with the government's prime directive is to ensure its bidders make a bare minimum of profit.

When asked what they need from their government counterparts in order to create a better working relationship and foster a robust industry that can contribute to a strong GDP, the industry panelists identified two key elements. One was “more accuracy in the procurement process” and the other was “predictability”. Industry must be able to foresee where profits and sustainability could potentially come from. The time it takes to award large projects is also a limiting factor to success.

It was noted that, since the beginning of time, a cornerstone of success for industry has always been ensuring the satisfaction of its client. It is believed that trust in the quality of the product and ease of customer service will lead to sustainability in the form of continued business. Not so with government contracts, which seem skewed to ensure previous successes gain no advantage, and must in some cases be hidden from decision-makers. Not taking into account a company's excellent past delivery performance, was said to contribute to industry's lack of incentive to perform to the best of its ability at all times.

A company's ability to invest goes beyond individual contracts, which means the prospect of being evaluated for value can be a powerful incentive for going that extra mile – if exploited, not suppressed.

Government employees were encouraged to exhibit courage in pursuing ways to truly streamline the procurement process, rather than repeatedly adding more and more layers of approvals and meetings.

Industry leaders across the spectrum have commented on a palpable “lack of trust” on the part of government negotiators. Does this mistrust come from contract negotiators feeling the pursuit of profit is somehow un-Canadian? Or does it mean a company does not care enough about its customers? Neither assumption is accurate, and this may be one area where a culture change could make a world of difference.

As one audience member exclaimed: “This was the best, most transparent conversation regarding the procurement process, I have ever heard.” While large-scale procurements will always be contentious due to the huge dollars and risk at stake, embracing the concept of open and unreserved dialogue, like what was experienced by this small group, has the potential to uncover procurement pitfalls and create a more progressive process.

The Telfer School of Management's Complex Program Leadership programs focus on the hard and soft skills necessary to successfully deliver inherently complex programs and projects, while emphasizing strategic thinking, creative problem solving, stakeholder engagement, and leadership skills as key building blocks for this goal.

http://defence.frontline.online/article/2018/2/9586-Bridging-the-vast-%C2%ADProcurement-Divide